While Prada plans its initial public offering, the banks helping the Italian fashion company get ready to go public are trying to figure out just how much it’s worth. At least two of them estimate the company, in its entirety, is worth €11 billion, which is about $15 billion at current exchange.
And that, if you’re not Bill Gates or Warren Buffett, is a whole lotta cash — and it means even more when you consider that until recently, most analysts estimated the company was only worth $9.5 billion. Only $9.5 billion.
So what’s with the rise? According to Women’s Wear Daily, Prada has been having a really good year thanks to its presence in the Asian market, and stands to keep making gains as that market continues to blossom.
The Italian luxury firm had record profits and sales in 2010. In the year ended Jan. 31, the company reported a 150.4 percent surge in net profits to 250.8 million euros, or $331 million at average exchange. Revenues totaled 2.05 billion euros, or $2.71 billion, up 31.1 percent compared with the year before.
Still, some warn that $15 billion might be a little too generous. Per Bloomberg: “A valuation exceeding 10 billion euros ‘may be too expensive,’ according to Lorenzo Crispoltoni, a senior fund manager at Banca Fideuram SpA. Prada merits a higher stock rating than peers because of its larger scale and stronger global standing” according to analysts at another firm.
And the last thing Prada would want to do at this stage is over value itself, which might lead to an unfavorable stock price right out of the gate. But as far as we’re concerned, Prada’s innovation and impact on the industry is worth a whole lot more than $15 billion.